WELLINGTON - Commodity prices softened in March after five months of steady gains, as lamb, butter and aluminium prices fell.
ANZ Bank, which measures prices in world and New Zealand dollar terms each month, yesterday said its world commodity price index fell a provisional 0.7 per cent in March.
The index that tracks prices in kiwi dollar terms fell 0.9 per cent.
"This easing follows five months of significant ... improvement. The ANZ world commodity price index stands 11.8 per cent higher than in March 1999," the bank said.
The bank also revised up its February world price index, citing an increase in fish prices.
Prices in New Zealand dollar terms hit a record in February after the kiwi dollar started sliding. The currency began the year at around 52.5USc and had slumped to 49.12c by the end of January.
It has recently recovered on positive economic signals and Standard and Poor's decision to reaffirm New Zealand's credit rating rather than downgrade as expected. The kiwi closed locally at 49.8USc yesterday.
ANZ said the March price dip in kiwi dollar terms reflected this slight appreciation of the New Zealand dollar against its key trading partners.
The Trade Weighted Index, which measures the kiwi's value against main currencies, was at 54.97 around 5 pm yesterday from 53.51 at the start of March.
The weaker the kiwi, the higher the payments to exporters when foreign currency earnings are converted.
However, the bank said the New Zealand dollar index was still at historically high levels and was 20.9 per cent above its level in March 1999.
"Significant falls in the price of aluminium, lamb and butter were behind the decline in the commodity price index. Wool prices also fell slightly," ANZ said.
Prices for most other commodities were stable, although apple prices were substantially higher and beef prices were also firmer.
- NZPA
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